Operational Programme 'Economic Development'

Programme under the Convergence Objective, co-funded by the European Regional Development Fund (ERDF)

Hungary

Additional tools

On 1 August 2007, the European Commission approved the Economic Development Operational Programme for Hungary covering the period 2007-2013. The Programme involves Community support for Hungary under the Convergence Objective. The total budget for the Programme is €3.4 billion, with Community assistance through the ERDF amounting to some €2.9 billion.

1. Aim and purpose of the programme

The Programme finances to a large extent the microeconomic measures of the National Reform Programme and complements its regulatory instruments.

The overall objective of the Programme is to promote permanent growth of the Hungarian economy by strengthening its production sector's competitiveness. More specifically, the objectives are as follows:

Increased research and development (R&D)/innovation capacity and activities, and related cooperation activities;

Comprehensive development of corporate capacities;

Development of the business environment;

Facilitating small and medium sized enterprises (SME) access to finance.

2. Expected impact of investments

The Programme is expected to have the following impacts:

Increased growth of Gross Value Added created by the corporate sector, especially among SMEs;

More new jobs created;

A higher e-business index;

Increased corporate R&D expenditures.

3. Priorities

The Programme is structured according to the following priorities:

Priority 1: R&D and innovation to encourage competitiveness [approximately 29% of total funding]

This priority focuses on:

boosting corporate R&D and innovation activities;

better use of research capacities and results;

support for cooperation between those involved in R&D&I processes.

The aim is to provide assistance to corporate research projects prior to launching new products and services on the market. Funding will also be available for the development of human resources linked to R&D and innovation activities. Support will be targeted at the establishment of modern R&D infrastructure, knowledge and technology transfer, networking among researchers, training, and sharing expertise. Priority will be given to the selected key scientific fields as specified in the Midterm Scientific, Technology and Innovation Strategy. Support for research infrastructure within development poles is envisaged to ensure concentration of investments and to contribute to Hungary's territorial cohesion.

Priority 2: Complex enterprise development with a focus on SMEs [approximately 39% of total funding]

The objective is to increase the income and market position of enterprises with growth potential, primarily micro-enterprises, but also small and medium-sized enterprises. In order to achieve this, financing is planned for complex enterprise development projects which could include: technological upgrading, development of corporate organisation and human resources, promotion of ICT, and development of business and marketing skills in enterprises. This priority focuses on modernising the SME sector by closing the gap in terms of productivity between SMEs and mostly foreign-owned large enterprises. Support will prioritise the introduction of new technologies and solutions that have a positive impact on the environment, energy and material savings, as well as investments that generate job opportunities in regions lagging behind.

Priority 3: Development of a modern business environment [approximately 7% of total funding]

This priority addresses the following: establishing a modern ICT network infrastructure, business site development and providing consulting services to enterprises. Access to broadband networks will receive support in the underdeveloped and disadvantaged regions, resulting in extended coverage and improved information security.

Competition between different broadband technologies will be promoted. The priority also aims to develop logistics centres, with a focus on inter-modality, including further improvement of related consulting and other services. A country-wide advisory network will be further developed, providing high level legal, financial and trade-related advice to enterprises.

In accordance with the JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative, this priority looks to tackle the failures of financial markets in Hungary and to improve the access of small and medium-sized enterprises to a variety of financial instruments and related advisory assistance. The financial instruments proposed are micro-credit guarantee instruments and equity investments.

Priority 5: Technical assistance [approximately 3% of total funding]

This priority finances technical and administrative tasks in relation to the implementation of the Programme. Support is provided for the operations of the Programme’s Monitoring Committee and for reporting and evaluation requirements.